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Shivanand Hegaje, an engineer from Navi Mumbai, went online a few days ago to book the new Mahindra & Mahindra XUV700, he was astonished to learn that it had all been sold out within an hour of the launch, according to a report that appeared in The Economic Times. The company had initially given a discounted rate for the first 25,000 bookings. ET quoted Hegaje as saying, “A tiny delay cost me Rs 50,000.” Even without the incentive, the next 25,000 units were sold out in about two hours.

Hegaje, on the other hand, was more prepared for the 10 a.m. opening this time. “The next day, I was ready at 9:45 a.m. – it’s like a Flipkart flash sale,” the report quoted Hegaje as saying.

This exemplifies the SUV craze that has grabbed Indian customers in the aftermath of the outbreak. People are queuing up despite high wait times, especially at the upper end.

The XUV700’s reception was akin to those of much-anticipated worldwide vehicles such as the Ford F-150 Lightning or the Tesla Cyber Truck, the report quoted Ravi Bhatia, head of auto consultancy firm Jato Dynamics India, as saying.

High demand for new automobiles, combined with a production shortage, has resulted in record bookings. More than half a million new car reservations are pending, which is twice the average number, the report said. The value of the pending orderbook is estimated at Rs 35,000 crore.

The report quoted experts cautioning that duplicate and induced bookings may have inflated numbers. There is also a marketing component to using booking numbers.

“It definitely indicates that there is a demand for well-equipped, upper-segment SUVs among Indian households eager to return back to work after an almost two-year hiatus,” The newspaper quoted Bhatia as saying. “Despite the fact that the booking amount was 2.8 times higher, the XUV700 received 50,000 bookings in the first two days.”

Seasonal Rush

The XUV700 cost Rs 21,000 to book, which is roughly three times the price required to book a Ford SUV in dollars.

The bookings add to the long line of over 5,00,000 consumers who have been forced to wait longer than usual for their automobiles owing to a global semiconductor shortage.

A similar booking frenzy occurred in the luxury two-wheeler industry, with the much-hyped Ola Electric scooter receiving orders worth Rs 1,100 crore in just two days, according to the company.

Demand vs Supply

Fast delivery is contingent on automakers ability to procure parts ahead of major festivals like Diwali. Many customers hope to get their hands on their new wheels during the festive season.

In the past, the car market had pending bookings of 230,000-250,000 units, with channel stock of four to six weeks. The present order book is more than double that, while channel stock is around half that, exacerbating the scarcity in the face of production reduction.

The queue might reflect higher demand, decreased supply, or a mix of the two, the report quoted Shashank Srivastava, senior executive director, sales and marketing, Maruti Suzuki,as saying. “Pending bookings are at an all-time high, and demand is moderate but not unprecedented for the holiday season,” he said. “The high number of pending bookings is more a result of supply-side limitations caused by the semiconductor scarcity.”